A picture from Facebook apparently showed Saif al-Islam after his captureColonel Gaddafi's son Saif al-Islam has been captured, Libya's interim justice minister says.
He is said to have been seized by fighters near the southern town of Obari and flown to Zintan in the north.
The former leader's son is the last key member of the Gaddafi family to be captured or killed.
Saif al-Islam, 39, is wanted by the International Criminal Court (ICC) for alleged crimes against humanity during the uprising against his father.
A picture apparently showing Saif al-Islam after his capture has appeared on the page of a Facebook group based in the Libyan town of Sabha.
A militia force allied to the National Transitional Council (NTC) said he had been captured in Obari, near Sabha, in the south-west, and was taken to their base in Zintan in the north.
A commander of the Zintan militia, Wisam Dughaly, said Saif al-Islam had been captured along with several aides, as they tried to smuggle him out to neighbouring Niger.
He said Saif al-Islam was not hurt - though the picture on Facebook showed his right thumb and two fingers bandaged.
The NTC's Justice Minister Mohammed al-Allagui confirmed the capture and said Saif al-Islam would be transferred to the capital, Tripoli, soon.
The ICC in The Hague says it has been officially notified of the arrest.
An ICC spokesman, Fadi el-Abdallah, told the BBC that Libya had a legal obligation to hand over Saif al-Islam - who is wanted on charges of crimes against humanity - to the court.
However Mr Abdallah added that the final decision on where any trial would take place was up to the ICC judges after consultations with the Libyan authorities.
"The good news is that Saif al-Islam is arrested, he is alive, and now he will face justice," ICC prosecutor Luis Moreno Ocampo said.
The reported capture leaves Gaddafi's former intelligence chief, Abdallah Senoussi, as the only Libyan ICC suspect still at large.
CelebrationsSaif al-Islam had been on the run since NTC forces took the capital, Tripoli, in August.
Colonel Gaddafi himself was killed on 20 October after being captured during the final battle for his hometown, Sirte.
The interim government in Libya has launched an inquiry into how he died.
The BBC's Rana Jawad in Tripoli says Saif al-Islam's capture is a very significant moment for Libyans.
They came to see Saif al-Islam as the heir apparent, as a younger version of his father due to his rhetoric during the uprising, she says.
However, at one time he was considered one of the more liberal of Col Gaddafi's sons and was courted in the West.
Celebrations erupted on the streets of Tripoli shortly after the news of his arrest emerged.
Our correspondent heard people hooting car horns, waving flags and firing guns into the air.
Saif al-Islam has been reported captured before. In August, rebel forces announced his arrest as they took control of Tripoli - only for him to appear in front of cameras to disprove it.
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